Shares With Benefits

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What's going on?

Bumble listed its shares on the stock market on Thursday, and investors used their best opening lines to slide into its good books: the dating apps shares initially rose 76% (tweet this).

What does this mean?

Bumbles shares listed at a higher-than-targeted $43 each, raising the company $2.2 billion in the process and valuing it at $8.2 billion. That led to a windfall for private equity firm Blackstone, which bought a majority stake in Bumbles parent company at a $3 billion valuation back in 2019.



Bumble (and subsidiary Badoo) is free to use, so it makes most of its money by selling dreams or rather, premium features that aim to increase users chances of finding a perfect match. And its working: Bumble has 2.4 million paying daters who spent a combined $417 million in the first nine months of 2020.

Why should I care?

Zooming in: Investors are ghosting Tinder.


Its been up and down for Bumble over the past couple of years: the company made a $66 million annual profit in 2019, but suffered a $117 million loss in the first nine months of 2020. Still, investors were keen to buy in, which couldve been because the companys price-to-sales ratio that is, its market capitalization to annual revenue of 14 times was lower than Tinder-owner Match Groups 20. In other words, Bumbles shares mightve been a bargain



For markets: IPOs are hot right now.


Bumbles not the first company to join the stock market this year, but its warm reception might set the tone for other high-profile listings to come. Newly infamous Robinhood, for instance, might be hoping for its own Bumble-esque liftoff, while cryptocurrency exchange Coinbase has opted for a direct listing. In other words, itll let investors set its share price directly, making its share price far less likely to shoot up when it debuts.

Originally posted as part of the Finimize daily email.

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